Dec 11, 2014

TDS on salary for FY 2014-15 circular dated 10 December 2014

CBDT issued a circular no. 17/2014 dated 10 December 2014 about TDS on salary during the financial year 2014-15 u/s 192 of income tax act. Full circular is as under.

Reference is invited to Circular No.08/2013 dated 25.10.2013 whereby the rates of deduction of income-tax from the payment of income under the head "Salaries" under Section192 of the Income-tax Act, 1961 (hereinafter ‗the Act‘), during the financial year 2013-14,were intimated. The present Circular contains the rates of deduction of income-tax from thepayment of income chargeable under the head "Salaries" during the financial year 2014-15 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules).

The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax

Department- www.incometaxindia.gov.in.

2. RATES OF INCOME-TAX AS PER FINANCE (No. 2) ACT, 2014:

As per the Finance (No. 2) Act, 2014, income-tax is required to be deducted under Section 192 of

the Act from income chargeable under the head "Salaries" for the financial year 2014-15 (i.e.

Assessment Year 2015-16) at the following rates:

A:Normal rate of tax

Total Income

Rate of tax

Where the total income does not exceed Rs.

2,50,000/-.

NIL

Where the total income exceeds Rs. 2,50,000

but does not exceed Rs. 5,00,000/-.

10 per cent of the amount by which the

total income exceeds Rs. 2,50,000/-

Where the total income exceeds Rs.

5,00,000/- but does not exceed Rs. 10,00,000/-

Rs. 25,000/- plus 20 per cent of the

amount by which the total income

exceeds Rs. 5,00,000/-.

Where the total income exceeds Rs.

10,00,000/-.

Rs. 1,25,000/- plus 30 per cent of the

amount by which the total income

exceeds Rs. 10,00,000/-

B. Rates of tax for every individual, resident in India, who is of the age of sixty years or

more but less than eighty years at any time during the financial year:

Total Income

Rate of tax

Where the total income does not exceed Rs.

3,00,000/-

NIL

Where the total income exceeds Rs. 3,00,000

but does not exceed Rs. 5,00,000/-

10 per cent of the amount by which the

total income exceeds Rs. 3,00,000/-

Where the total income exceeds Rs. 5,00,000/-

but does not exceed Rs. 10,00,000/-

Rs. 20,000/- plus 20 per cent of the

amount by which the total income

exceeds Rs. 5,00,000/-.

Where the total income exceeds Rs. 10,00,000/-

Rs. 1,20,000/- plus 30 per cent of the

amount by which the total income

exceeds Rs. 10,00,000/-

C. In case of every individual being a resident in India, who is of the age of eighty years or

more at any time during the financial year:

Total Income

Rate of tax

Where the total income does not exceed Rs.

5,00,000/-

NIL

Where the total income exceeds Rs. 5,00,000

but does not exceed Rs. 10,00,000/-

20 per cent of the amount by which the

total income exceeds Rs. 5,00,000/-

Where the total income exceeds Rs. 10,00,000/-

Rs. 1,00,000/- plus 30 per cent of the

amount by which the total income

exceeds Rs. 10,00,000/-

2.2 Surcharge on Income tax:

The amount of income-tax shall be increased by a surcharge @10% of the income-tax on payments to

an individual taxpayer, if the total income of the individual exceeds Rs 1 crore during FY 2014-15

(AY 2015-16). However the amount of Surcharge shall not exceed the amount by which the

individual‘s total income exceeds Rs 1 crore and if surcharge so arrived at, exceeds such amount

(assessee‘s total income minus one crore) then it will be restricted to the amount of total income

minus Rupees one crore.

2.3.1 Education Cess on Income tax:

The amount of income-tax including the surcharge if any, shall be increased by Education Cess on

Income Tax at the rate of two percent of the income-tax.

2.3.2 Secondary and Higher Education Cess on Income-tax:

An additional education cess is chargeable at the rate of one percent of income-tax including the

surcharge if any, but not including the education cess on income-tax as in 2.3.1.